When starting in the publishing business, it can be difficult to determine how much you can earn from your releases. It’s important to note that some titles will sell better than others. Unfortunately, that’s the name of the game. In fact, you might find that some releases sell incredibly well, while others flop. But don’t be discouraged. This is a part of the business. So, here are three things you need to keep in mind when calculating how much money you can earn from publishing.
Become familiar with the 80/20 rule
Pareto’s Law or the 80/20 rule states that 80% of your income comes from 20% of your releases. If that sounds discouraging, don’t worry. This happens in all businesses. Hollywood studios generally have two or three flops for every mega-blockbuster. Therefore, you can expect that a handful of your titles will yield the bulk of your earning. While you shouldn’t expect to lose money on your other releases, you shouldn’t expect all of your titles to sell at the same pace, at least not at the same time.
A simple method for calculating your earnings
A simple way to calculate your expected earnings is to take your projected sales and multiply them by your book’s price. For instance, if you expect to sell 10 books at a $5.99 price per book, you can expect to earn $59.99. However, you must take into account royalties from your chosen publishing platform. Amazon typically takes a 30% to 40% cut. So, if we deduct 30% of your projected sales, you can expect to earn about $41.99.
A more complex method of calculating your earnings
In the early going, you want to keep things as simple as possible. As you gain more experience, you will get more data on sales. This data can help you to build analytics. These analytics will aid you in determining the volume of sales and earnings you can realistically expect. Over time, you’ll accumulate more and more information. There may come a point where an Excel spreadsheet may be too time-consuming for you to crunch yourself. So, using apps such as KDP Rocket can help you process all of your sales information. In the end, the aim is to have as much objective quantitative data as possible. This will enable you to make clear decisions based on cold-hard data. Using KDP Rocket can help you accurately predict your future sales, and thereby earnings, based on real data. Then, all you need to do is multiply your projected sales by your book’s price. You can even test out different scenarios such as projected earnings at different price points or running special offers.
Please bear in mind that projecting your earnings takes time and practice. Gradually, you will become increasingly proficient in determining your projected earnings fairly accurately. This will enable you to make sound decisions based on quantitative data.